Grigerik v. Sharpe
247 Conn. 293, 1998 Conn. LEXIS 447, 721 A.2d 526 (1998)
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Rule of Law:
For a third party to have enforceable rights under a contract, both contracting parties must intend to create a direct obligation from the promisor to that third party. Additionally, the seven-year statute of limitations for actions against engineers applies to professional negligence claims even when the planned improvement is not completed due to the alleged negligence.
Facts:
- In 1985, Edward Lang owned an undeveloped plot of land and negotiated its sale to Joseph Grigerik.
- Grigerik agreed to pay a higher price of $16,000 (instead of $9,000 'as is') on the condition that Lang first obtain the town's approval of the land as a building lot.
- To fulfill this condition, Lang hired engineer Gary Sharpe and his firm to perform soil testing and design a septic system.
- Lang informed Sharpe that he needed the site plan to secure town approval for a building lot and that he had a buyer waiting for this approval.
- Sharpe's firm completed the site plan on October 16, 1985. Lang used it to gain approval from the wetlands commission.
- On November 19, 1985, Lang sold the property to Grigerik for $16,000.
- In 1986, when Grigerik applied for building permits, a new town sanitarian denied the application due to soil concerns and required further testing.
- After additional tests in 1987 and 1989, state officials determined the land was unsuitable for a septic system, and building permits could not be issued.
Procedural Posture:
- Joseph Grigerik filed a lawsuit against Gary Sharpe and his engineering firm in the Connecticut trial court for negligence and breach of contract.
- A jury returned a verdict in favor of Grigerik on both counts after finding, in response to special interrogatories, that he was a 'foreseeable' beneficiary but not an 'intended' or 'contemplated' beneficiary of the contract.
- The trial court rendered judgment for Grigerik on the verdict.
- The defendants (Sharpe and his firm) appealed to the Appellate Court of Connecticut.
- The Appellate Court reversed the judgment, holding that the two-year statute of limitations barred the negligence claim and that a new trial was required on the contract claim under a 'promisee's intent only' standard.
- Both Grigerik (as appellant) and the defendants (as cross-appellants) petitioned for and were granted certification to appeal to the Supreme Court of Connecticut.
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Issue:
1. Does the seven-year statute of limitations for actions against professional engineers, § 52-584a, apply to a negligence claim where the planned 'improvement to real property' was never completed due to the engineer's allegedly defective services? 2. Is the intent of the promisee alone sufficient to create enforceable contract rights for a third-party beneficiary, or must both parties to the contract share that intent?
Opinions:
Majority - Borden, J.
1. Yes. The seven-year statute of limitations under § 52-584a applies to a negligence action against an engineer even when the planned improvement is not completed due to the alleged defect. The court reasoned that legislative amendments to the statute were intended to make it the controlling statute of limitations, overriding shorter general negligence statutes. It would be an irrational result to provide a shorter limitations period for a defect so severe it prevents construction than for a defect discovered after construction is complete. 2. No. The intent of the promisee alone is not sufficient; the intent of both contracting parties is required to create enforceable rights for a third-party beneficiary. The court reaffirmed its traditional 'dual intent' rule, stating that the ultimate test is whether the parties to the contract intended that the promisor should assume a direct obligation to the third party. This rule provides certainty and allows parties to control the scope of their contractual obligations. The court explicitly rejected foreseeability as the standard for third-party beneficiary status, as that is a tort concept, not a contract concept.
Analysis:
This decision solidifies two important principles in Connecticut law. First, it establishes that the specialized seven-year statute of limitations for professional negligence by architects and engineers (§ 52-584a) applies broadly, even to situations where a project is aborted due to the alleged negligence, preventing defendants from using a shorter general negligence statute. Second, the court strongly reaffirmed the traditional 'dual intent' requirement for third-party beneficiary status, resisting a trend toward a more lenient standard. This protects contracting parties from liability to unforeseen third parties and maintains a clear distinction between contract law's focus on mutual assent and tort law's focus on foreseeability.
